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Market Commentary 14/04/16

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EUR/USD – Profit Taking May Cause A Retest At Supply

Yesterdays down-move has caused bank traders to begin taking some profits off their trades.

We can see the profit taking came in at three points with the most recent bout causing the market to move up, the move almost managed to spike the supply zone but missed it by around 9 pips. The move down we are seeing on the current candle may end up being bank traders taking more profits off their trades using the additional sell orders which are coming into the market from retail traders.

If this ends up being the case then its likely for the market to move back into the supply zone which could give us an entry short in the next move down, watch for a bearish engulfing candle inside the zone tonight and tomorrow.

USD/JPY – Market Moves Lower After Hitting Supply Zone

USD/JPY has continued pulling back today but a drop lower created a supply zone which the market tested before moving lower.

The resulting drop from the supply zone nearly pushed the market into the demand zone we identified yesterday, I would recommend you stay away from placing any more trades at this zone as I believe the bull candle which nearly hit the zone is actually a reaction to the itself, therefore if the market drop into the zone I wouldn’t expect to see the market react to the zone in any significant way.

I’m not convinced this is the end of the pullback, I still think the market has higher to climb before turning back in the direction of the overall trend, for entries long keep an eye on if the market breaks the high at the top of this move down, if it does market the highs as a breakout zone and watch for signals to get long.

AUD/USD – New High, Potential Bearish Pin Bar Forming

Today we have seen AUD/USD make a new higher high which suggests the move higher could be continuing but at the same time there is a chance we’ll see today’s candle manifest into a bearish pin bar.

We can see how the market has just encountered some selling which means banks are ether taking profits off long positions or placing sell trades because they believe a reversal is about to take place. The candle which made a new high is likely to contain a large number of trapped traders, if the market continues to fall from its current location these traders will close their trades and the movement lower will become bigger.

If the market moves down enough it will make the daily candle have a large wick on it which will turn it into a bearish pin bar, this pin might be a good short trade due to where it is appearing in the move up, the market has been advancing for a reasonable length of time now and another move lower may take place before the up-trend resumes.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades